WTI trades with modest intraday gains above mid-$73.00s, lacks bullish conviction

• WTI attracts some buyers on Tuesday amid rising geopolitical tensions in the Middle East. 
• China’s economic woes, along with US recession fears, keep a lid on any meaningful upside.
• The USD draws support from rebounding US bond yields and contributes to capping gains.

West Texas Intermediate (WTI) US crude Oil prices edge higher during the Asian session on Tuesday and recover further from a multi-month low, around the $71.20-$71.15 region touched the previous day. The commodity, however, struggles to capitalize on the move beyond the $74.00 mark and currently trades with only modest intraday gains, just above mid-$73.00s.

Iran, Hamas and the Lebanese group Hezbollah pledged to retaliate against Israel for last week’s assassination of Hamas political chief Ismail Haniyeh in Tehran. This keeps the risk of a broader Middle East conflict in play and fuels concerns about supply disruptions from the key Oil producing region. Apart from this, subdued US Dollar (USD) price action, amid rising bets for a bigger interest rate cut by the Federal Reserve (Fed), turn out to be key factors acting as a tailwind for Crude Oil prices. 

The intraday positive move, however, lacks bullish conviction in the wake of worries about an economic downturn and slowing demand in China – the world's top oil importer. Adding to this, the incoming softer US macro data suggested that the world's largest economy was slowing faster than initially expected, which, in turn, could hurt fuel demand. This, in turn, is holding back traders from placing aggressive bullish bets around Crude Oil prices and keeping a lid on any meaningful appreciating move. 

The aforementioned mixed fundamental backdrop makes it prudent to wait for strong follow-through buying before confirming that the black liquid has bottomed out in the near term. In the absence of any relevant US economic releases on Tuesday, fresh geopolitical developments surrounding the ongoing conflicts in the Middle East will continue to influence Crude Oil prices. Apart from this, the American Petroleum Institute (API) report on US Oil inventory might provide some impetus to the commodity.